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The survey also found regional and income level disparities, revealing the 'peer pressure to one up each other over and over,' according to Mr Alderman.

Parents in one of the lowest income brackets from the Visa survey reported planning to spend the most on prom.

PROM SPENDING WILL VARY ACROSS THE U.S.

Regionally, the survey found:

Northeastern families plan to spend an average of $1,944

Southern families plan to spend an average of $1,047

Western families plan to spend an average of $744

Midwestern families plan to spend an average of $696

Parents earning less than $50,000 a year said they plan to spend more an average of $1,307, while families in high income brackets, earning more than $75,00 a year plan to spend between $700 and $1,000.

Spending beyond their means, those who make between $20,000 and $29,999 a year will spend more than $2,600.

'This is social-arms-race spending. It's extreme,' says Mr Alderman.

The Visa survey found that teens are covering 39per cent of the cost, while parents are planning to pay for 61per cent.

'One of the reasons that prom spending may be running amok is that parents are paying the vast majority of the costs, giving teens little incentive to economize,' Alderman said.

He continued, warning: 'It's important to remember that the prom is a high school dance, not a wedding. Parents need to set limits in order to demonstrate financial responsibility.'